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How should investors position themselves for the second half of the year? |
| Resilient Large-Cap Alpha Picks |
CGS has highlighted six large-cap alpha picks:
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ALPHA PICKS (LARGE-CAP) |
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|
Company |
Price |
Target Price |
Total Return* (%) |
Core P/E (x) CY26F |
Core P/E (x) CY27F |
3-yr EPS CAGR (%) |
|
AEM Holdings |
10.90 |
14.79 |
36.2% |
47.0 |
31.7 |
100.8% |
|
DBS Group |
66.29 |
69.90 |
10.4% |
17.9 |
15.9 |
4.2% |
|
DFI Retail |
3.82 |
5.50 |
48.0% |
17.2 |
15.7 |
9.7% |
|
iFAST Corp |
9.15 |
13.45 |
48.1% |
21.3 |
17.0 |
17.1% |
|
SATS |
4.39 |
5.20 |
20.2% |
20.2 |
17.0 |
18.9% |
|
Sembcorp Industries |
6.36 |
7.68 |
25.0% |
11.3 |
9.8 |
6.0% |
|
Average |
- |
- |
- |
16.7 |
15.5 |
5.2% |
* includes dividend yield
These companies are positioned to capitalize on key market themes, including higher inflation, AI infrastructure, and defensive earnings growth.
- DBS Group: As interest rates potentially remain higher for longer, Singapore banks are set to benefit from recovering net interest margins.
CGS names DBS as its "top pick among SG banks, with its superior ROE and defensible FY27F yield of 5.2%". 
AEM Holdings: Riding the massive wave of AI investment, AEM stands out as a "key beneficiary of higher semiconductor demand arising from its key customers, driving a steep earnings recovery and translating into a 3-year EPS CAGR of c.100%".- DFI Retail: For defensive earnings growth, DFI is currently undergoing a strategic asset-recycling exercise.
Analysts see a "clear path for improved profitability, with further upside from margin repair for its existing portfolio". - Sembcorp Industries: SCI is a standout due to "fixed margins and cost pass-through mechanisms in long-term power contracts".
In addition to its defensive profile, rising Uniform Singapore Energy Prices have lifted spark spreads, offering "potential for upside from higher spark spreads and gas portfolio optimisation" alongside new contributions from its recently acquired Alinta Energy. - iFAST Corp: Driven by new business growth, iFAST is poised for a significant profitability bump as its previously elevated staff costs finally stabilize.
CGS analysts highlight "continued revenue contribution from its eMPF project alongside inception of a secondary pension scheme ORSO (Occupational Retirement Scheme Ordinance) from 2H26F," cementing its status as a reliable defensive growth play. - SATS: Benefiting from a robust expansion in its cargo-handling capabilities, SATS has consistently outpaced the global air cargo industry's growth. Its "extensive cargo network that provides visibility for cargo movement for its customers should support continued market share gains within the global air cargo market".
This momentum keeps SATS firmly on track to hit its ambitious FY29F financial targets, translating to an impressive 18% earnings CAGR for FY26F-27F.
| High-Growth Small-Mid Cap Picks |
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ALPHA PICKS (SMALL-CAP) |
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|
Company |
Price |
Target Price |
Total Return* (%) |
Core P/E (x) CY26F |
Core P/E (x) CY27F |
3-yr EPS CAGR (%) |
|
CSE Global |
1.53 |
2.00 |
32.7% |
23.0 |
18.4 |
22.2% |
|
Info-Tech Systems |
0.92 |
1.35 |
51.9% |
11.0 |
10.8 |
16.4% |
|
Marco Polo Marine |
0.14 |
0.21 |
50.0% |
15.3 |
12.6 |
25.0% |
|
Pan-United Corp |
1.43 |
1.85 |
33.3% |
15.2 |
13.8 |
16.0% |
|
Average |
- |
- |
- |
16.9 |
14.6 |
10.5% |
* includes dividend yield
As the year progresses and macroeconomic headwinds are fully priced into the market, shifting focus toward smaller companies could yield significant alpha.
The CGS report's small-mid cap alpha picks are:
- CSE Global: Another major AI play, CSE is a "key beneficiary of higher capex investments due to its role in building the data centre infrastructure to support the growth of its customers".
Their recent US$1.5 billion electrification contract with Amazon ensures highly visible revenue.
- Marco Polo Marine: Despite recent share price weakness tied to oil fluctuations, MPM is "well-positioned to deliver c.30% yoy growth in FY26F, underpinned by fleet expansion, new yard capacity, and initial revenue recognition from its largest-ever S$198m newbuild order".
- Info-Tech: Added for its robust tech ecosystem, analysts "foresee strong performance across its core HRMS platform and Academy training," supported by a rapid expansion in its user base.
- Pan-United: Benefiting from a robust local construction sector, PAN's strategic model of "Floating rates and short-term fixed prices allows PAN to continue to see growth from more building material demand to support elevated construction activity".
→ See also:Insights from the RHB Top 20 Singapore Small Cap Jewels 2026 report
